Fight Between DSTV And Federal Government Explained

Fight Between DSTV And Federal Government Explained

CPC boss Babatunde Irukera is ready to fight it out with DSTV over new subscription rates (Kogi Reports)

The Federal Government, represented by the Consumer Protection Council (CPC) and Multichoice (or DSTV, if you would) have been locked in a battle over increased subscription rates.

This article explains where that dispute is at the moment and what that means for DSTV subscribers.

For clarity, Multichoice and DSTV will be used interchangeably in this explainer article to mean the same thing.

Multichoice is the name of the company that runs DSTV—a cable television platform.

When did the dispute begin?

All of this started in July when Multichoice announced hikes in its subscription rates.

On July 9, 2018, Multichoice sent text messages to subscribers notifying them of a hike in rates from August 1.

According to the price hike announcement, DSTV premium package will go for N 15,800 rather than the old rate of N14,700; Compact Plus from N9,900 to N10,650; Compact from N6,300 to N6,800; Family from N3,800 to N4,000, and Access from N1,900 to N2,000.

The new price regime was going to take effect from August 1, 2018, DSTV announced.

CPC challenges price increase in court

Soon after DSTV increased prices of its bouquets, the CPC led by its Director General, Babatunde Irukera, ran to court to stop the hike.

On August 20, a Federal High Court sitting in Abuja stopped MultiChoice Nigeria Limited from executing its recent increase in DSTV subscription fees.

The court also restrained MultiChoice from any act that could interfere with the regulatory process of the CPC.

Why did CPC sue Multichoice?

CPC said by suing Multichoice, it wasn’t about to regulate price for a corporate organisation or trample on the concept of free market.

“The council did not intend to regulate price or in any way interfere with the commercial interface between Multichoice and its customers in fixing price”, CPC said.

CPC explained that by increasing its subscription rates, DSTV had breached an agreement it reached with the Nigerian government after its price hike of 2015.

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That agreement, CPC says, was called a Joint Consent Order.

What is this Joint Consent Order?

In CPC’s words, “Over a period of time during which mutual concerns and reservations were addressed, the Council and Multichoice agreed and adopted a Proposed Mutual Joint Consent Order.

“The terms and obligations included an unopposed and undisputed requirement and understanding that Multichoice will not charge, revise or modify any material term or conditions of service(s) for a period of 24 months.

“Multichoice never expressed any concerns or dissatisfaction with this clause of the Consent Order that required Multichoice to maintain status quo on its Terms and Conditions (which naturally includes pricing) for the 24-month period”.

Essentially, CPC is saying that it had reached an agreement with Multichoice not to increase subscription rates for 24 months. However, while waiting for the execution of this agreement, Multichoice went behind its back and increased subscription rates.

CPC added that what Multichoice did amounted to “bad faith” and “undermined both the Council and its regulatory process”.

According to CPC, that was why it rushed to court to stop Multichoice dead in its tracks and stop the implementation of the new price regime.

Justice Nnamdi Dimgba granted CPC’s prayers which sought to stop “Multichoice from executing and perpetrating a modification of a material term of its contract with its customers”.

The court also asked that the status quo be maintained, meaning that old subscription rates should be reverted to.

What was DSTV’s response?

Let’s just say DSTV laughed off CPC and the court, and promised not to revert to old subscription rates.

The press statement from DSTV reads in part: “Multichoice Nigeria received an interim court order dated 20 August from the Federal High Court regarding the price adjustment that we implemented on 1 August 2018.

“We believe that the order is an affront to the free market economy and we have now filed a Notice of Appeal and an application for stay of execution, pending the hearing of the Appeal. The CPC has been accordingly served with the requisite processes.

“In light of the application for a stay of execution, the status quo therefore prevails.

“We remain committed to providing the best quality of entertainment and premium content at the best possible prices.” 

Essentially DSTV was saying it has filed an appeal against Justice Dimgba’s judgment and that until that appeal is heard, customers will keep paying the new subscription rates whose implementation kicked off on August 1.

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It’s also important to note that DSTV said nothing about entering an agreement not to hike rates for 24 months, with CPC.

Where does that leave you as a subscriber?

Well, this may turn out to be a long drawn legal battle between CPC and Multichoice.

For the moment, DSTV hasn’t reverted to pre-August 1 prices and the new rates still apply for all subscribers.

The CPC intends to fight this in court and its DG, Irukera, is now asking subscribers who paid the new rates to send his organisation evidence of payment, as it commences its second round of a legal war with DSTV.

Receipts of payment from subscribers will be used as exhibits against DSTV by CPC.

DSTV subscribers who paid at the new price instead of the old price, have been advised to send their receipts to the email: multichoicecompliance@cpc.gov.ng.

CPC says it needs as many receipts as possible to show the court that DSTV is in violation of its order.

Section 2(I) of the Consumer Protection Council Act (CPCA) mandates the council to “provide redress to obnoxious practices or unscrupulous exploitation of consumers”.

In other words, the CPC is empowered by law to look out for the consumer and prevent corporate organisations from exploiting the consumer.


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